On Monday, H.C. Wainwright adjusted its outlook on ChromaDex (NASDAQ:CDXC), raising the 12-month price target to $8.00 from the previous $6.00 and maintaining a Buy rating on the stock.
The revision follows ChromaDex's third-quarter financial report, which showed a 31% increase in total net sales compared to the same period last year, mainly driven by its flagship product TRU NIAGEN and NIAGEN ingredient sales.
ChromaDex's quarterly revenue reached $25.6 million, slightly surpassing the $25 million projected by the analyst. TRU NIAGEN sales contributed $18.1 million, while ingredient sales saw a nearly 370% surge from the year-ago period. The company's adjusted EBITDA rose to $2.9 million from $0.5 million, and earnings per share were reported at $0.02, beating the estimate of $0.01.
The firm's updated full-year 2024 sales forecast for ChromaDex is now $98.5 million, an increase from the earlier $95.9 million projection. Looking further ahead, the 2025 sales estimate has been raised to $122 million from the prior $114 million.
The analyst notes that gross margins have improved to 63.5%, a 210 basis point increase from the previous year, and sales and marketing expenses have decreased to 27.5% of net sales, marking an improvement of around 350 basis points.
ChromaDex anticipates a 15% year-over-year revenue growth for the full year of 2024, citing new partnerships, channels, and products as potential sources of additional revenue. The company plans to continue investing in research and development to foster innovation while expecting general and administrative expenses to decrease by approximately $1.5 million compared to the previous year.
The upgraded price target reflects a lowered discount rate, now at 11% down from 14%, and an increase in revenue multiples from 5.3x to 5.8x within H.C. Wainwright's comparable universe of companies. The positive adjustments are attributed to a faster sales ramp and the introduction of new product lines.
In other recent news, ChromaDex has appointed a new CFO, Ozan Pamir, who brings a wealth of experience from his previous position as CFO of 180 Life Sciences.
In addition, ChromaDex has made strategic changes in its accounting firm due to Marcum LLP's independence concerns related to its upcoming merger with CBIZ (NYSE:CBZ) Inc. The company is yet to announce a successor accounting firm.
On the product front, the company has successfully launched the Niagen Plus product line and anticipates a 10-15% year-over-year growth for 2024. In partnership with Wells Pharma of Houston, ChromaDex is expanding the distribution of its Niagen product to 14 additional wellness clinics across the United States.
Furthermore, ChromaDex has announced strategic partnerships with entities like Watsons, Nestle Health Science, and Pure Encapsulations. These partnerships are expected to enhance brand awareness and market penetration.
These are the recent developments for ChromaDex.
InvestingPro Insights
ChromaDex's recent financial performance and H.C. Wainwright's optimistic outlook are further supported by real-time data from InvestingPro. The company's market capitalization stands at $448.58 million, reflecting investor confidence in its growth trajectory. ChromaDex's revenue for the last twelve months as of Q3 2024 reached $91.67 million, with a notable revenue growth of 31.21% in the most recent quarter, aligning with the strong sales performance highlighted in the article.
InvestingPro Tips suggest that ChromaDex's net income is expected to grow this year, which corroborates the analyst's positive earnings forecast. The company's stock has shown significant momentum, with a remarkable 73.37% price return over the last month and an even more impressive 295.95% return over the past year. These figures underscore the market's enthusiastic response to ChromaDex's improving financial metrics and growth prospects.
It's worth noting that ChromaDex is trading near its 52-week high, with a price that is 97.99% of its highest point over the past year. This aligns with the article's mention of the increased price target set by H.C. Wainwright. However, investors should be aware that the stock is trading at a high P/E ratio of 297.82, indicating that the market has priced in significant growth expectations.
For those interested in a deeper analysis, InvestingPro offers 17 additional tips for ChromaDex, providing a comprehensive view of the company's financial health and market position.
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